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Really Confused About Strata Title AND Community Title Insurance

Discussion in 'Property Management' started by Michael.Knight, 3rd Aug, 2015.

  1. Michael.Knight

    Michael.Knight Member

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    Hey guys Im at my wits end with this. Say for example I have 2 units :

    Unit 1 is strata titled, in a complex of 10 units. Do I need to get strata title insurance to insure the building? Because the body corporate says they don't insure the building...

    Unit 2 is community titled. Do I need community title insurance to insure the building?

    If so, then how come RACV say they can insure the unit as long as it has its own address???

    Im really really confused...
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Do the units have a body corporate or strata manager? If so, these will be collecting a fund (using the monthly or quarterly fees that you pay) to have an insurance policy of it's own, generally only insuring the common areas.

    Depending on the layout of the units, common area is sometimes the building (such as a block of flats) and some times it isnt (such as free standing villas).

    For the former, you probably only need contents insurance (or LL insurance if its an IP). For the latter you'll likely need building and contents (or LL if IP), such as my IP in Perth. I found with my one in WA that some insurers didn't like doing it, just call around til you find one that will.
     
  3. Michael.Knight

    Michael.Knight Member

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    Yeah they have a body corporate....

    The problem I have is when insurance company asks is unit strata titled? I say 'yes' then they say 'no we don't do that'....

    Now Im worried that an insurer will insure the address, but when it comes time to claim then they'll say 'no we only insure freestanding houses'...
     
  4. Chilliblue

    Chilliblue Well-Known Member

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    Strata insurance is a generalised insurance that covers the common area of the strata entity and is a shared cost amongst lot owners. Areas such as walls, ceilings, balconies, stairs, car park parks etc (anything that is registered and is shared).

    Anything that own that is not covered by the strata insurance (and yes you should check to confirm) is your responsibility. For example floor coverings, light fittings, joinery etc.

    I believe that strata insurance is not adequate for community title properties due to several reasons so a more specific insurance policy specifically tailored is required.
     
  5. Michael.Knight

    Michael.Knight Member

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    Thanks for clearing that up DT and Chilli.... these are my first units so was unsure about what strata means and why my usual insurance company wouldnt insure the units...

    Thanks for clarifying that, MK
     
  6. dabbler

    dabbler Well-Known Member

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    Hi MK, you are also entitled to ask to look at the policy, ask the manager to send you a copy so you can look at it yourself.

    Most people I have met who live in strata buildings have no idea what it is or how it works, so don't be too worried about that.
     
  7. Scott No Mates

    Scott No Mates Well-Known Member

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    To add to the above, if your property is mortgaged you have to ensure that the building is insured (not contents).
     
  8. matchsticks

    matchsticks Active Member

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    Strata titled properties have strata insurance - hence why your insurance company will not provide you with cover. You can and should take out landlord insurance and contents insurance. If the property was razed to the ground, strata insurance will cover things like cost to rebuild, loss of rent (because of the catastrophe), etc. but what you end up with is "an empty shell" and you will need to have contents insurance to cover internal fittings that are not part of the building.

    Always a good idea to check with your body corporate manager that the strata insurance is up to date and that the right valuation is used to ensure the building is covered (for the right amount) in the event of a building catastrophe.